The Miseducation of Informal Sector Biashara

 

Biashara in Africa’s emerging economies – Nigeria and Kenya – are at loggerheads with the state.  An ever bulging young demographic  and a failure to absorb them into the formal economy has resulted in increased biashara.  The informal sectors’ low barrier to entry favours entrepreneurial Africans. They have carved out biashara opportunities for themselves mostly in trade and services.

But, the peculiar nature of the informal economy presents a challenge for state agencies.

This week, for the umpteenth time, City Hall officials from Kenya’s capital, Nairobi, vowed to crack down on informal sector biashara people: Hawkers, Matatus, Boda bodas, car washes, roadside eateries,  and street families.

“The Nairobi County Government has formed a sub-committee tasked with restoring order and sanity in the central business district(CBD) following complaints from businesses over hawkers’ invasion of key streets. All car washes, kiosks and hawkers will be arrested with immediate effect” – Business Daily

The Nigerian state of Lagos clamped down on street trading just 2 weeks ago, in a bid to sanitize streets, 

“Lagos State Governor Akinwunmi Ambode, said the renewed enforcement was in line with Section One of the Lagos State Street Trading and Illegal Market Prohibition Law of 2003, prohibiting street trading.” – source

Meanwhile, in Zimbabwe,  protests continue, after the government gave street vendors an ultimatum to leave by end of June or face arrest. They declined, saying

“We are not going anywhere until the government give us jobs, it’s better they kill us. I have an accounts degree and was forced into street vending because there are no jobs. They destroyed the economy and now they ban us from selling on the streets.” – Ventures Africa

It is unfortunate entrepreneurs are labelled lawbreakers. The reactions by government officials is skewed.

When I walk through Nairobi’s streets, Tom Mboya and Moi Avenue on weekdays evenings, I see entrepreneurs. Young men, women, breastfeeding mothers and the disabled engaging in trade and services. They will sell you anything! Foodstuffs, electronics, mitumba (second hand clothes) and transport services.

Biashara people naturally seek out demand and will go where they can find it. The massive foot traffic of Nairobi (or Lagos, or Harare) after work makes for a great concentration of demand.

 

Biashara Matters

informal sector jobs

“In Kenya, it is estimated that the informal sector in excess of 35 per cent to the GDP and employs close to 80% of the workforce.” Bitange Ndemo

“In Nigeria, informal trading of which hawking is a part thus accounts for 10% of total Nigeria’s GDP, bigger than crude production” Yemi Kale, Director General of Nigerian Bureau of Statistics

 

How we view this sector matters for both public and the private sector in

  • Crafting public policy

Biashara people are taxpayers and economic drivers just like formal institutions, a fact that is often forgotten. Just like we craft targeted policy for the formal economy, after considering stakeholders interests, so we should for biashara.

  • Product and service design for Sub Saharan Africa consumer markets

Biashara people are the consumers of the formal economy’s products and services like mobile money transfer services, mobile banking services, sports betting, airtime, and FMCGs.

We need to understand them and their operating environment (business or personal), if we are going to sell goods and services to this sector.

  • Innovation for Sub Saharan Africa’s economies

Once we appreciate biashara people as a market segment with its own merits, we can free ourselves of our one eyed biases and innovate for their peculiar biashara challenges.

For example, we can start by not referring to them as Bottom of the Pyramid people.

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